TaxTMI 
TaxTMI 
1999 (6) TMI 192
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....ding 8519.99 of the Customs Tariff, therefore the corresponding tariff in the ITC HSN requires that a licence be produced because the items falling under that heading are restricted for import, being consumer goods. The appellants contention is that the goods would fall under 8543.89 or 9007.92 and the corresponding ITC HSN classification being 900711.02. Therefore, as there is no restriction against the said ITC HSN heading hence the goods would be under OGL. They are in appeal against the confiscation, redemption fine and penalty. 3. Heard Shri Habibulla Badsha, learned Senior Advocate assisted by Shri R. Sudhakar and Shri E.S. Govindan, learned Advocates for the appellants and Shri S. Sankaravadivelu, ld. DR. 4. Learned Sr. Advocate submits that the goods imported would be either parts or accessories of a Cinematographic Projector and would therefore not require any import licence for the following reasons :- (1) Since the goods cannot directly satisfy the human needs unlike a Tape Recorder or Turntable or Gramophone etc. Therefore, they are not consumer goods. Instead, they are sub-systems of Cinematographic Projector because they can only function when ....
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....1 (S.C.) wherein it has been that the interpretation of import policy given in writing by the C.C.I. & E. (now DGFT) is binding on Customs authorities and that the Joint C.C.I. & E. can issue such clarification. Therefore the order-in-original which has brushed aside this clarification as being against the policy as well as the Customs Tariff is totally illegal and erroneous and the order-in-appeal impugned which upholds the same also suffers from the same infirmity. 5. Learned Senior Advocate therefore submits that the items imported falling under 90071102 of ITC (HS) and not being consumer goods are not having any restrictions for import, and hence there was no need for their obtaining any import licence prior to their import. He therefore prayed for the orders impugned to be set aside with consequential relief. 6. Learned DR on the other hand led us through the order-in-original and strongly reiterated the findings contained in paras 8.01 to 8.11 thereof which need not be repeated for brevity's sake here. Ld. DR also submitted that the equipment can be connected to a cinema projector by a mere clamp and was therefore not an integral part or sub-systems of the cin....
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....uch a Senior Officer as the Joint Director would sign this clarification only if he had the authority to act on behalf of the Directorate General of Foreign Trade and not otherwise. Therefore, the said clarification could not be brushed aside in the manner in which the ld. DR has sought to do so. 9. In further rebuttal, ld. Senior Counsel submitted that any reference to explanatory notes of HSN is totally irrelevant for the purpose of classifying the items imported under ITC Policy. When the ITC (HS) is now available as fully aligned with the HSN system therefore as far as ITC classification is concerned, any recourse to the HSN explanatory notes would not be legally correct. 10. He further counters that in para 8.2 of the order-in-original the main point upheld is that since the goods are consumer goods falling under 8519 of the Customs Tariff therefore they would require a licence. In this connection, he reiterated his arguments noted above that the goods were not consumer goods. 11. He also counters the argument of ld. DR that the Accessories Rules, 1963 would apply in this case on the ground that such Rules would only apply at best for computation of cus....
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....n may require further amplification etc., but that is immaterial. What is material is that such sound reproducing devices and apparatus must be capable of functioning independently. This test of capability to reproduce sound independently has been accepted as the main criterion in the following decision : (a)  Sound blaster cards cannot reproduce digital sound on their own, but can work only if connected to a computer. Thus, it was held by the Tribunal in C.C. v. HCL HP in 1999 (105) E.L.T. 362 (T) that they would be classifiable under 8473.30 and not under 8519.99. (b) In this connection, the Tribunal also held that a TV coder works only in conjunction with the PCB of a computer and is therefore not a video reproducing apparatus falling under 8519.99/8521.99 but under 8473.30 as parts of a computer. (c)  Similarly, it was held therein that Video blaster cards work only as accessories to the computer to generate video signal (i.e. they cannot generate the signal by themselves independently of the computer) and therefore would not fall under 8521.99 but under 8473.30 15. Applying this test to the present items in dispute we find that the technical cha....
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....ub-systems of the cinematographic projector which go to change the performance of the said cinematographic projector. Being therefore of a clearly different genre than independent sound reproducing apparatus including cassette players or record players, they are also not consumer goods. Instead, they would more appropriately fall within the ambit of capital goods which change radically the nature of performance (output) of already (previously) installed capital goods in a cinema theatre viz. the projector and the sound system. Since the output of the cinematographic projector, on use of the items imported, changes radically in its fundamental nature and content (from an ordinary 2 track sound system to a 6 track surround, high fidelity sound system with the clarity of a digital system if needed), therefore it cannot be a mere accessory. An accessory merely enhances the efficiency of a capital goods, but in this case there is a distinct and radical change in the characteristics of the output itself. 18. We find that the appellants had applied to the DGFT, New Delhi for a clarification on these items' classification under ITC (HS) and the ITC Policy. Merely because the reply ....